GAO: More Networx contract data needed

By Roseanne Gerin

Mar 04, 2005

Missing information about the FTS Networx telecommunications contracts could force the General Services Administration to delay the awards beyond their April 2006 schedule, an official with the Government Accountability Office told House lawmakers yesterday.

GSA has not set the scope of the contracts to be awarded under the Networx program, established criteria for evaluating proposals or determined traffic volumes required by agencies at specific locations, said Linda Koontz, GAO's director of information management issues. Koontz testified at a hearing on Networx before the House Government Reform Committee.

Networx is the 10-year, governmentwide voice and data communications contract, and is worth up to $20 billion. The program consists of two parts: Networx Universal, which will provide full telecom services to all government locations; and Network Enterprise, which will provide specialized, Internet-based services with less-extensive geographic coverage.

GSA released draft requests for proposals in November 2004 and plans to issue the final RFPs next month.

'These uncertainties represent risks to potential offerers that may, in turn, affect the quality of their proposals, particularly their ability to offer the best prices to the government,' Koontz said in her testimony. 'In addition, delays in establishing evaluation criteria and traffic volumes could affect GSA's ability to award the contract by April 2006 as planned.'

The committee, chaired by Rep. Tom Davis (R-Va.), asked GAO to assess the Networx procurement. For its testimony, GAO examined Networx program planning documents, public presentation and comments on GSA's plans. It also reviewed GSA analyses, and interviewed program officials and four vendors that issued comments to GSA on the acquisition, Koontz said. GAO conducted its audit between December 2004 and February 2005.

Several industry executives who testified at the hearing also want GSA to issue a second set of draft RFPs so they can comment on any changes since the first drafts were released.

GSA has not issued information on the estimated scope of Networx that bidders need to estimate their business risks, Koontz said. Federal acquisition rules require indefinite-quantity contracts such as Networx to estimate minimum and maximum levels of goods or services that the government will purchase.

While GSA has set minimum revenue guarantees for each part of the contract, it has not estimated contract maximums, Koontz said. GSA indicated that it would provide the maximum amounts in the final RFPs, she added.

Second, GSA must finalize the evaluation criteria it plans to use for the Networx program because its draft RFPs did not contain the information, according to Koontz. Federal acquisition regulations require agencies to fully describe their evaluation criteria when they plan to base award decisions on factors other than price, she added.

GSA believed it would be premature to issue the evaluation criteria when it was still developing the acquisition, Koontz said. GSA told GAO it plans to include the evaluation criteria in the final RFPs, she said.

Third, GSA has not assessed the level of services or traffic volume needed at each location to let bidders evaluate the government's requirements and tailor their proposals accordingly, Koontz said. GSA has not completed this task because of delays in developing an underlying software system, and it estimates that traffic volumes will not be available until May, Koontz testified.

Koontz also testified before the committee in September 2004 during its second hearing on Networx. At that hearing, she said GSA addressed industry's initial questions about the procurement. Since then, GSA has made progress in Networx's planning by responding to industry and agency concerns over the acquisition's structure and program requirements, she said.